Wärtsilä, the Finland-based manufacturer of diesel and gas engines for use in powering ships and electricity generation, has signed an agreement with Zhenjiang CME to invest €12m in a new propeller-manufacturing facility. The investment includes the construction of an 8,000 sq metre factory next to an existing plant that makes fixed pitch propellers.

Most of the equipment needed for the plant will be relocated from a factory in Drunen, the Netherlands, where production activities will cease by the end of this year. Inauguration of the new Wärtsilä CME Zhenjiang Propeller factory is planned for the second quarter of 2011.

"Capacity in [China’s shipbuilding] industry is growing very fast, and Chinese shipyards are building technically more demanding ships,” said Lars Hellberg, Wärtsilä’s vice president, industrial operations.

An estimated 70 per cent of the propellers will be sold in China.

Located on the Yangtze River, Zhenjiang is an important commercial and transportation centre in the southwest of Jiangsu province.